Forest Laboratories to acquire exclusive rights in the U.S. for Saphris sublingual tablets

Forest Laboratories Holdings Limited, a wholly owned subsidiary of Forest Laboratories, Inc. (NYSE:FRX) today announced that the company is acquiring exclusive rights in the United States for Saphris^® (asenapine) sublingual tablets, a treatment for adult patients with schizophrenia or acute bipolar mania, from Merck Sharp & Dohme B.V., a wholly owned subsidiary of Merck & Co., Inc. (NYSE:MRK).

Under the terms of the agreement, Forest will make an upfront payment of $240 million and additional payments to Merck based on defined sales milestones. Merck will remain responsible for product supply. Forest will assume responsibility for continued commercialization, including completing certain post marketing studies of Saphris following a transition period, and will be the marketing authorization holder. Other details of the financial terms of the agreement were not disclosed. The agreement is expected to close in early CY2014 pending regulatory review and satisfaction of all closing conditions.

Saphris is an atypical antipsychotic approved by the US Food and Drug Administration (FDA) and launched in 2009. Merck recorded net sales of $150 million in the 12month period ending September 2013.

"We are pleased to gain access to another commercial product in the CNS category. With Viibryd and our soon to be launched product, Fetzima, Saphris complements our current position in psychiatry and gives us access to the important schizophrenia segment as we continue to work toward registering and commercializing cariprazine with our partner Gedeon Richter," said Brent Saunders, chief executive officer and president of Forest Laboratories. "This deal is immediately accretive to Forest's earnings and makes us more relevant to our customers, as well as our current and future business partners in the CNS category."

"The decision to divest Saphris in the U.S. is part of our ongoing strategy to sharpen our commercial and R&D focus and improve our operational effectiveness," said Jay Galeota, president, Hospital and Specialty Care at Merck. "This agreement will allow Merck to focus both R&D and commercial resources on other opportunities, while complementing Forest's product portfolio and allowing for continued access to Saphris for physicians and patients."

Schizophrenia and acute bipolar mania are significant areas of unmet medical need and it is important to have treatment options available for physicians and patients.